Thu, 20 Sep 2018 DAILY MARKET REPORT. KFH Treasury Thu, 20 Sep 2018

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1 Thu, 20 Sep 2018 DAILY MARKET REPORT KFH Treasury Thu, 20 Sep 2018

2 20-Jun 20-Jun Forex Market JAPANESE YEN M %chg 3M %chg 1.61% 2.03% The Yen barely budged yest after the BOJ stood pat on policy as expected. Gov Kuroda's presser also didn't deliver fresh policy cues. -Ahead today, all eyes are on the 20yr JGB auction (robust demand expected) and the LDP vote. -We retain our call to buy the Yen on dips on the view that risk aversion will come back into play ahead. USD/JPY was tightly ranged yest within /45, ending a touch softer at There was scant reaction to the BOJ decision or Gov Kuroda's presser. It's topside was capped by large option barriers at and exporter selling interest that trails up above that level, which has triggered profit-taking from leveraged names since then. -Sell around /27, targeting a run down to , placing stops at EURO CLOSE 1M %chg 3M %chg % 0.72% -The Euro was initially on the backfoot yest amidst negative cross-flows (Aussie and Sterling), but pushed higher early in the European session. -Part of this was down to leveraged buying in EUR/CHF (positioning ahead of today's SNB policy decision). -That said, the Euro found failed to sustain any topside traction, and was subsequently weighed down by fresh Italian political/fiscal concerns. -Italian dpty PM di Maio is seeking a EUR28 bln budget adjustment that include EUR10 bln for the "citizens income" proposal, which would increase the deficit to GDP ratio to 2.5%, well above FinMin Tria's pledge last wk of keeping it at 1.6%. - Sell around /94, targeting a run down to , placing stops at

3 20-Jun 20-Jun Forex Market POUND STERLING CLOSE 1M %chg 3M %chg % -0.27% The Sterling briefly retreated against the Euro yest, and it's early gains against the risk/commodccies were also unwound. -These negative cross-flows conspired to weigh down on GBP/USD.There was also drag from EU President Tusk's warning that a no-deal scenario remains possible, even though "limiting damage caused by Brexit is a shared interest". -On his part, Barnier said that the EU is ready to improve it's Irish backstop proposal. -GBP/JPY however ended firmer amidst lift from the other Yen pairs. Early this morning, there was a knee-jerk pop higher after UK PM May ruled out a 2^nd Brexit vote in an interview with the Daily Express, and stated that "the withdrawal agreement is virtually agreed","chequers is about the future relationship" and that she's confident of striking a good deal for the UK. -Sell around , targeting a run down to , placing stops at TURKISH LIRA CLOSE -No updates as of today. 1D %chg 1M %chg % 3.87%

4 20-Jun 20-Jun Commodities GOLD CLOSE 1D %chg 1W %chg % -0.16% -Gold prices held steady on Thursday, after rising in the previous session, as the dollar softened amid easing Sino-U.S. trade tensions and investors wait on direction from next week's U.S. Federal Reserve meeting. -Spot Gold was little changed at $1, by 0106 GMT, after rising 0.5 percent in the previous session. -U.S. Gold futures were up 0.1 percent at $1,209 an ounce BRENT CLOSE 1D %chg 1W %chg % -0.43% -Oil rose for a third day on Thursday amid another drawdown in U.S. inventories and strong U.S. gasoline demand, while signs OPEC may not raise output to address shrinking supplies from Iran also supported prices. -Global benchmark Brent crude was up by 20 cents, or 0.3 percent, at $79.60 by 0214 GMT, after gaining half-a-percent on Wednesday. -U.S. West Texas Intermediate crude was up 55 cents, or 0.8 percent, at $71.67 a barrel, after rising nearly 2 percent the previous session.

5 Daily Market Report MARKET SUMMARY CENTRAL BANK OF KUWAIT INSTRUMENT OPEN HIGH LOW CLOSE %CHG 1D EUR % GBP % JPY % TRY % POLICY RATES INDICATOR As of Value Prior Change Dollar Idx % ON Repo Rate 20/Sep/' Brent % 1W Repo Rate 20/Sep/' WTC % 1M Repo Rate 20/Sep/' Gold % KWD ON Rate 20/Sep/' KWSE Index % Discount Rate 20/Sep/' UPCOMING ECONOMIC RELEASES Tenor Value Tenor INDICATOR Ctry / Regn Time For Prior Consensus ON M 2.34 CPI, Core Nationwide YY JP 20/Sep 01:30 Aug SW M 2.57 CPI, Overall Nationwide JP 20/Sep 01:30 Aug 0.9 1M Y 2.88 CPI MM NSA* JP 20/Sep 01:30 Aug M 2.24 Jobless Claims 4-Wk Avg US 20/Sep 14:30 w/e Philly Fed 6M Index* US 20/Sep 14:30 Sep KIBOR RATES KWD (CBK FIX) CLOSE LIBOR RATES OTHER C-BANK RATES 1D %chg 0.03% INDICATOR As of Value Prior Change FED Target Rate 13/Jun/' Tenor Value Tenor Value ECB Refinancing Rate 10/Mar/' ON M 2.00 BOE Bank Rate 02/Aug/' SW M 2.25 BOJ Prime Rate 10/Jul/' M Y 2.50 TRY ON Lending Rate 13/Sep/' Value

6 Economic Calendar & News ECONOMIC CALENDAR - Upcoming shortly INDICATOR Ctry / Regn Time For Prior Consensus CPI, Core Nationwide YY JP 20/Sep 01:30 Aug CPI Ex Fresh Fd and Eng JP 20/Sep 01:30 Aug 0.3 CPI MM NSA* JP 20/Sep 01:30 Aug 0.10 CPI Index Ex Fresh Food* JP 20/Sep 01:30 Aug CPI, Overall Nationwide JP 20/Sep 01:30 Aug 0.9 CPI NSA* JP 20/Sep 01:30 Aug Nationwide Core CPI MM* JP 20/Sep 01:30 Aug Nationwide Core CPI YY* JP 20/Sep 01:30 Aug 0.0 Foreign Bond Investment JP 20/Sep 01:50 w/e Foreign Invest JP Stock JP 20/Sep 01:50 w/e Retail Sales MM GB 20/Sep 10:30 Aug Retail Sales YY GB 20/Sep 10:30 Aug Retail Sales Ex-Fuel MM GB 20/Sep 10:30 Aug Retail Sales Ex-Fuel YY GB 20/Sep 10:30 Aug Retail Sales Ex-Fuel YY GB 20/Sep 10:30 Aug Initial Jobless Claims US 20/Sep 14:30 w/e Jobless Claims 4-Wk Avg US 20/Sep 14:30 w/e Continued Jobless Claims US 20/Sep 14:30 w/e Philly Fed 6M Index* US 20/Sep 14:30 Sep Philly Fed Capex Index* US 20/Sep 14:30 Sep Philly Fed Business Indx* US 20/Sep 14:30 Sep Philly Fed Employment* US 20/Sep 14:30 Sep NEWS AND STREET BUZZ Global Top News -Asian stocks rose in early trade on Thursday following a second day of gains on global share markets amid easing investor concern over the impact from the U.S.-China trade war, but markets remained cautious. -Yemen's central bank, based in territory controlled by its exiled government, nearly doubled its interest rate on Wednesday in an effort to stabilise the riyal after violent demonstrations against a plunging currency. -The government of Abu Dhabi is looking at proposals to restructure some $1.2 billion of troubled bonds that were issued by Abu Dhabi state-owned carrier Etihad Airways in partnership with other airlines, sources familiar with the matter said. -The United Arab Emirates central bank has cut its forecast for economic growth this year after non-oil growth slowed slightly in the second quarter, according to a report released by the bank on Wednesday. -Alibaba Chairman Jack Ma said the company can no longer meet its promise to create 1 million jobs in the United States due to U.S.-China trade tensions, Chinese news agency Xinhua reported on Wednesday. -Prime Minister Theresa May appealed directly to fellow European Union leaders on Wednesday to drop "unacceptable" Brexit demands that she said could rip Britain apart, urging the bloc to respond in kind to her "serious and workable" plan. -Prime Minister Shinzo Abe was expected to win a ruling party leadership vote on Thursday, setting him on track to become Japan's longest-serving premier and try to cement his legacy, including by revising the pacifist constitution. -Major Chinese broker Nanhua Futures is planning to start trading on the London Metal Exchange in the first half of next year as the market experiences a wave of fresh interest from China. -Qatar has appointed Mansour Ibrahim al-mahmoud as chief executive of the Qatar Investment Authority, one of the world's largest sovereign wealth funds, the state news agency said on Wednesday. Philly Fed New Orders* US 20/Sep 14:30 Sep 9.90 Philly Fed Prices Paid* US 20/Sep 14:30 Sep 55.00

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